In a big blow to Bharat Heavy Engineering Limited (BHEL), the National Company Law Tribunal (NCLT) has asked the PSU to either pay the amount due to a MSME under procurement policy or go to jail and be declared insolvent.
The rap from the court comes as a follow up of the first ever notice served to the BHEL, the state run company which reportedly recorded a turnover of Rs 28,840 crore in the year, by NCLT in response to the plea filed by a MSME regarding pending payment for over 11 years. The PSU is now in a do or die like situation.
Shishir Gupta, Director, Teknow Consultants & Engineers Pvt Ltd, the MSME that have taken the case against BHEL explained the scenario.
Protesting against the denial of payment by the PSU for over 11 years, Gupta had approached the National Company Law Tribunal (NCLT) to file case against BHEL under the Insolvency and Bankruptcy Code (IBC)
Responding to the appeal of the MSME entrepreneur, NCLT had issued a notice under Section 9 that mandated BHEL to respond by 21st August.
He added that the legal counsel from the side of the PSU has requested the court to allow some time to be able to respond.
Gupta informed that BHEL in its affidavit to court, has already accepted the liability before the bench, leaving the PSU with just two options in the next hearing of the court scheduled on Tuesday, August 29th.
“Either BHEL will have to concede and accept that it denied payments to us for all these years, and the court will instruct the PSU to make the payment along with the due interest, or it will be declared insolvent. If the counsel designates the PSUs as insolvent, the BHEL stocks will terribly fall by over 40 per cent,” said Gupta.
Sourcea also revealed that the court has even warned BHEL Chairman of strict action in case he fails to take appropriate action by the next hearing.
With the next hearing due in two days from now, the MSME entrepreneur expects that the court will do the justice and stand with the MSMEs that for long have been exploited at the behest of the big corporates and PSU.